Interest and reaction time analysis of credit card offers

Interest and reaction time analysis of credit card offers

Managerial implications of high level research procedures


Consumers receive numerous unsolicited credit cards in the mail, day after day.

Indeed, the number of such offers over a year could go into the billions. Yet, for the most part these offers find their way into the rubbish bin, before the addressee even bothers to open the mail. This fact of life results in increasing costs to acquire the credit card user. All too often that acquisition is aborted after a competitor company offers a cheaper card (eg, lower APR for an interim period) coupled with other acquisition benefits.

An approach to the credit card problem has been presented by the authors in a previous paper. That paper dealt with the issue of identifying the key messages that would spark customer interest (optimisation), and the marriage of this information with direct marketing efforts. The paper suggested that concept response segmentation provides a viable way to identify different groups in the credit card population. These groups may have different needs/wants and would be responsive to a variety of messages. This method has been shown to increase significantly the acquisition of credit cards.

In direct marketing there are other aspects to the credit card offer beyond the persuasive power of specific content. One of these aspects, the speed at which a customer can process the information in an offer, may well be addressed by research and then optimised. To the degree that the credit card offerer understands the factors that drive speed of information processing, the offer can be made to have more impact by being engineered to be understood more easily and quickly. A combination of strong, persuasive messages sent to the right people, and optimised to be quickly understood can combine to increase the ‘lift’ of the message.


Representative APR 391%. Average APR for this type of loans is 391%. Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

Calculate APR